We investigate the consequences of low-quality audits for engagement partners in the US and the role audit firm quality control systems play in this process. We employ a sample period during which the identity of the engagement partner on specific audits is not publicly known to isolate the...

We examine the role of political connections in US state government-awarded corporate economic incentives, and whether a role (if present) is cause for constituent concern. We find that companies are more likely to receive an incentive award in a politically connected state and this association...

This paper examines whether the identity of the individual audit partners provides informational value to capital market participants beyond the value provided by the identity of the audit firms. Using data from Taiwan, where firms are mandated to disclose the names of the engagement partners,...

We examine the lobbying behavior of state governments and their financial statement users in the development of public pension accounting standards GASB 67 and 68. We find that states' opposition to liability increasing provisions is increasing in the severity of pension plan underfunding,...

We provide large sample evidence that credible hedge commitments reduce the agency costs of debt and that accounting conservatism enhances hedge commitments. We examine 2,338 bank loans entered into by 263 mandatory derivative users that are contractually obligated by interest rate protection...

Although balanced budgets are widely used throughout the world, there is considerable debate on whether they are effective. Poterba (1997) provides two theories on the effectiveness of balanced budget restrictions. The institutional irrelevance view suggests that balanced budget rules are...

We ask whether credit rating agencies receive higher fees and gain greater market share when they provide more favorable ratings. To investigate this question we use the 2010 rating scale recalibration by Moody's and Fitch, which increased ratings absent any underlying change in issuer credit...

This study uses Regulation Fair Disclosure (FD) as a plausibly exogenous shock to the information environment to identify the causal effect of information asymmetry on corporate financing behavior. Although Regulation FD prevents firms from selectively disclosing material information to market...

We find a negative association between a state’s fiscal condition and the use of discretion in applying Governmental Accounting Standards Board (GASB) rules to understate pension funding gaps. We also find that the use of discretion is negatively associated with states’ decisions to increase...

This paper investigates whether gubernatorial elections affect state governments’ accounting choices. We identify two accounts, the compensated absence liability account and the unfunded pension liability account, which provide incumbent gubernatorial candidates with flexibility for...